The Case For Renewable Hydrogen: California Takes The Lead

The hydrogen economy of the future has been tempting researchers for decades with the promise of cheap, abundant, zero emission fuel. Now, finally, hydrogen fuel cells and fuel cell electric vehicles are slipping into the mainstream. That's all well and good, but the hydrogen economy will not be a sustainable one until renewable hydrogen enters the scene.

The problem is that the primary source of hydrogen today is natural gas. The good news is that multiple sources of renewable hydrogen have been identified, and a new report from the organization Energy Independence Now (EIN) provides a good rundown on the emerging options.

The renewable hydrogen challenge

The "Renewable Hydrogen Roadmap" report was produced by EIN in partnership with the Leonardo DiCaprio Foundation and the California Hydrogen Business Council.

The report focuses on meeting California Governor Jerry Brown's goal of 5 million zero-emission vehicles on the road in California by 2030, and 200 hydrogen stations by 2025.

That's a pretty tall order. California is one of several U.S. states that have been aggressively pursuing the hydrogen economy, but even so its roster of hydrogen fuel stations only adds up to a current list of 35.

Now add the need to produce and transport vast quantities of renewable hydrogen to supply those 200 stations, and you have a real challenge on your hands.

Why hydrogen?

In terms of decarbonizing the California transportation sector, the new EIN report offers several arguments for including renewable hydrogen rather than relying exclusively on battery electric vehicles.

One main benefit cited by EIN is flexibility. The report notes that hydrogen acts as both a storage medium for renewable energy and a fuel:

Hydrogen has the unique potential to connect the clean energy systems of the future by allowing storage of renewable energy that can be used to fuel transportation, generate heat for industrial processes and send electricity to the grid.

Another factor involves leveraging hydrogen to help meet a proposed 100% clean energy mandate in California, which is currently under debate in the state legislature:

...the California Legislature is currently considering SB 100, which would establish an overall state target of 100% clean energy for California by 2045, while accelerating the interim benchmarks of 50% by 2026 and 60% by 2030. Due to the intermittent nature of wind and solar, the state simply cannot reach 100% renewable without energy storage. Similarly, due to the range, size and recharging limitations of battery electric vehicles, FCEVs are a necessary component of the state’s ZEV goal.

Scaling up renewable hydrogen

EIN notes that industry stakeholders have already been gearing up for a sharp increase in renewable hydrogen production, due to a previous California mandate of 33.3% renewable hydrogen for the state's publicly funded fueling stations.

The organization further notes that industrial hydrogen has already scaled up for oil refining and ammonia among other uses. Elements of that infrastructure could be applied to scaled-up renewable hydrogen production as well.

So much for the good news

Getting from opportunity to commercial production is a bumpy road, though. For each source, the report identifies both benefits and challenges.

Biogas is an especially interesting example because it underscores how renewable energy technology can provide environmental benefits beyond decarbonization.

For example, EIN notes that the agriculture industry is responsible for almost 60% of methane emissions in California. The state's 1,400 dairy farms contribute a significant amount to that total, due to the practice of storing animal waste in open lagoons. Those lagoons could be capped to capture the gas, which could then provide a renewable feedstock for hydrogen production.

Additionally, dairies could be encouraged to install digesters, which provide a more efficient way to produce gas from animal waste. Both lagoon caps and digesters would help reduce local air, water and soil impacts from animal waste, while cutting down on greenhouse gas emissions from dairy operations.

In taking stock of the challenges, though, EIN foresees that a significant increase in public support would be needed to scale up hydrogen production from biogas in California:

...only 13 digesters currently operate in the state, with another three under construction. Today, no dairy digester projects generate hydrogen from biogas in California. The current projects use biogas to generate electricity, or for combined heat and power generation.

Nevertheless, the potential for scaling up does exist. EIN cites a report from the National Renewable Energy Laboratory:

NREL calculates that 486,000 tonnes of hydrogen could be generated annually from dairy digesters throughout the US, not including existing systems. Further analysis shows that 8 of the top 14 counties in the U.S. with the highest hydrogen production potential from animal manure are in California and could generate 72,300 tons of hydrogen annually.

Getting consumers on board

The EIN report also warns that some potential opportunities -- electrolysis with renewable energy, for example -- are not recognized under current federal policies for the purposes of tax credits and other financial benefits.

Even assuming that policy changes can accommodate additional sources for renewable hydrogen, the business case still needs to be made:

Ultimately, in order to sway consumers,renewable hydrogen needs to be cost competitive with gasoline (and conventional hydrogen) on a per-mile basis. Until consumers are either forced to shoulder the indirect costs of fossil fuels (or dramatic increases in oil prices) and/or policy makers increase incentives for alternative fuels,hydrogen must be priced comparably to gasoline to achieve rapid market growth as a transportation fuel.

The fuel could be free (some auto manufacturers are currently giving it away), but the cost of fuel cell vehicles also needs to come down. State tax incentives, income-eligible rebates and other benefits are still operational in California, but an $8,000 federal tax credit expired after 2016 and was not renewed.

The business case for renewable hydrogen

The good news is that several companies are already focusing on the renewable angle when adopting fuel cells.

One is the hydrogen fuel cell electric semi truck start-up Nikola. The company's business model is based on fueling stations that produce hydrogen by "splitting" water through electrolysis, with an electrical current provided by wind or solar power where available.

Nikola launched for pre-orders in 2016 and the concept quickly took hold, even under competition from Tesla's new battery electric truck. A recent pre-order of up to 800 Nikola fuel cell trucks from beer giant Anhueser Busch could spark additional interest.

On the biogas angle, back in 2015 IKEA inked a deal with the company Bloom Energy for its "Bloom Energy Server" stationary fuel cells. Though the fuel cells themselves are fuel-agnostic, IKEA opted for the biogas pathway. As of last year the company had biogas fuel cells installed at five locations in California.

Circling back around to the report, it seems clear that the hydrogen economy is already taking shape. The main issue now is how to accelerate its growth while decarbonizing, and that will require some heavy lifting by policy makers and taxpayers.

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes. She is currently Deputy Director of Public Information for the County of Union, New Jersey. Views expressed here are her own and do not necessarily reflect agency policy.